“In politics you have to focus on what you can deliver and that’s what we’ve done and we’ll continue to do,” Mr Turnbull told reporters at Parliament House in Canberra on Monday.

“The outstanding reservations of a number of our colleagues, combined with the absence of bipartisan support, means that as long as that remains the case we won’t be in a position to take that legislation forward.”

One crucial change will be abandoning plans to legislate carbon emission targets through the NEG, which would be blocked by Coalition backbenchers in the one-seat majority parliament.

The government will also adopt a recommendation from the consumer watchdog to establish a “default market offer” on energy bills.

“A price expectation will give consumers a clear picture of how much they should be paying for their electricity,” Mr Turnbull said.

The Prime Minister believes setting a default power price will give customers a clear picture of when they are being ripped off.

The ACCC will also receive extra funding to monitor electricity prices and act on misuse of market power.

“Ultimately, this will secure lower power bills in the short to medium term, but we want the big power companies to know that we mean business,” Mr Turnbull said

“We will introduce significant new powers so as the ACCC can step in where there has been abuse or misuse of market power.”

A “power of last resort” will allow the government to intervene and break up market concentration if major companies gobble up their smaller competitors.

Opposition Leader Bill Shorten, on a visit to a solar farm near Canberra, described Malcolm Turnbull as the “white flag Prime Minister”. He said the energy backdown was not about lowering power prices or reducing pollution.

“It is just about appeasing Turnbull’s enemies in the Liberal Party so he can keep his job,” he said.